Carbon accounting 101 | SDA Token Learn

Credible impact measurement separates genuine sustainability from greenwashing. Understanding methodologies enables investors to verify claims and compare projects accurately.

Carbon Accounting Methodologies

Lifecycle Assessment (LCA)

Complete carbon footprint includes all emissions from cradle to grave:

Technology	Manufacturing	Transport/Install	Operations	Decommission	Total (g CO₂/kWh)
Solar PV	40-45	3-5	0-1	2-4	45-55
Wind (Onshore)	8-10	1-2	0-1	1-2	10-15
Wind (Offshore)	10-12	3-5	0-1	2-3	15-21
Hydro	N/A	N/A	4-10	N/A	4-10
Nuclear	6-8	1-2	0-1	2-3	9-14
Natural Gas	3-5	1-2	450-470	1-2	455-479
Coal	5-8	2-4	780-810	2-3	789-825

Solar and wind are 10-80x cleaner than fossil fuels across full lifecycle. Even accounting for manufacturing (which uses fossil fuels today), renewables repay their carbon debt within 1-3 years of operation, then generate clean energy for 20-30 years.

Avoided Emissions Calculation

Standard Formula for Avoided Emissions: Avoided CO₂ (tons) = Energy Generated (MWh) × Grid Factor (tons CO₂/MWh) - Lifecycle Emissions Example: 1MW Solar Farm, 1 Year, US Average Grid Generation: 1,500 MWh Grid Factor: 0.4 tons CO₂/MWh (US average) Gross Avoided: 1,500 × 0.4 = 600 tons CO₂ Lifecycle Emissions: 1,500 MWh × 0.045 tons/MWh = 67.5 tons CO₂ Net Avoided: 600 - 67.5 = 532.5 tons CO₂ Equivalents: - 115 passenger vehicles off road for 1 year - 60,000 tree seedlings grown for 10 years - 1.35 million pounds of coal NOT burned

Grid factors vary dramatically by region. Coal-heavy grids (e.g., Poland 0.78 tons/MWh) see greater avoided emissions than clean grids (e.g., Norway 0.02 tons/MWh). This means the same solar panel avoids 39x more emissions in Poland than Norway—context matters.

Additionality Principle

For carbon credits and impact claims, projects must demonstrate "additionality"—that emissions reductions wouldn't occur without the project:

Regulatory Surplus: Project must exceed what regulations require. Can't claim credit for compliance.
Financial Additionality: Project must not be profitable without carbon revenue or impact investment. If project would happen anyway, there's no additional impact.
Common Practice: Technology must not be standard practice in the region. First solar farms in a coal-dominated region have strong additionality; the 500th does not.
Baseline Scenario: Must define what would have happened without the project (usually continued fossil fuel use).

💡 Tokenization Ensures Additionality Through New Capital

By mobilizing new capital sources (retail investors who couldn't previously access renewable infrastructure), tokenization creates genuine additionality. Projects funded through tokens represent new capital that wouldn't flow through traditional channels. Token holders can verify their investment directly caused project development—clear, measurable impact.